Form 25-NSE is the SEC filing that removes a company’s stock from a national securities exchange such as the NYSE or Nasdaq. Filed electronically through EDGAR, it sets two deadlines in motion: trading on the exchange ends 10 days after filing, and the company’s registration under Section 12(b) of the Securities Exchange Act terminates 90 days after filing. Your shares still belong to you after a Form 25 is filed, but where they trade, how easily you can sell them, and how much information you’ll get about the company all change.
What the Form Does
The full name of the form is “Notification of Removal from Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934.” It does two connected things. It pulls the stock out of the exchange’s trading system, and it starts the withdrawal of the company’s Section 12(b) registration, which is the registration that requires quarterly reports (10-Q), annual reports (10-K), and current event reports (8-K).1U.S. Securities and Exchange Commission. Form 25 – Notification of Removal from Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934
The filing is required by Rule 12d2-2 of the Exchange Act. Either the exchange or the company itself can file it. In practice, the exchange files when it is forcing a company off, and the company files when the decision is voluntary.2eCFR. 17 CFR 249.25 – Form 25, for Notification of Removal from Listing and/or Registration
The Two Dates That Matter
Once Form 25 is filed, the timeline is fixed. On day 10, the stock is officially delisted and trading on the exchange stops. From that point on, the security is no longer considered listed on a national securities exchange, even though its registration has not yet fully wound down.3U.S. Securities and Exchange Commission. Form 25 – Notification of Removal from Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934 – Section: General Instructions
On day 90, Section 12(b) registration terminates, unless the SEC sets a shorter period. During those 90 days, the company still has to file any periodic reports that come due under Section 13(a). After the 90 days, the Section 12(b) reporting obligation is suspended.3U.S. Securities and Exchange Commission. Form 25 – Notification of Removal from Listing and/or Registration Under Section 12(b) of the Securities Exchange Act of 1934 – Section: General Instructions
Who Files It, and Why
Delisting is either voluntary or involuntary, and Form 25 works the same way in both cases. What changes is who initiates it.
A company’s board may choose to leave an exchange after a merger, when going private to escape the cost of public reporting, or to move to a different exchange. Before filing, the issuer has to give the exchange at least 10 days’ written notice and publish a press release explaining the decision; the notice also has to be posted to the company’s website if it has one. No shareholder vote is required under SEC rules, and the NYSE has confirmed that board approval alone is enough.4U.S. Securities and Exchange Commission. Final Rule – Removal from Listing and Registration of Securities Pursuant to Section 12(b) of the Securities Exchange Act of 1934 A board can pull a stock off an exchange without asking you first.
Involuntary delisting happens when a company falls below the exchange’s continued listing standards. Common triggers include a share price that stays too low, insufficient stockholders’ equity, market value below the required minimum, missed financial reports, and bankruptcy. On Nasdaq, a stock trading below $1.00 for 30 consecutive business days gets a deficiency notice and 180 calendar days to recover.5The Nasdaq Stock Market. Listing Rule 5810 – Nasdaq 5800 Series Before filing Form 25 against an issuer, the exchange has to give notice, offer an opportunity to appeal, and provide public notice at least 10 days before the delisting takes effect.4U.S. Securities and Exchange Commission. Final Rule – Removal from Listing and Registration of Securities Pursuant to Section 12(b) of the Securities Exchange Act of 1934
What Happens to Your Shares
You still own the shares. What changes is the market.
Trading Moves to the OTC Market
Delisted stocks migrate to the over-the-counter market, run by OTC Markets Group. It has several tiers. OTCQX is the top, with financial standards and current SEC reporting required. OTCQB sits below it with lighter standards. The Pink and Grey markets are below those, with minimal or no reporting requirements.6OTC Markets Group. OTC Markets 15c2-11 Tier Chart Most involuntarily delisted stocks land on the Pink market or lower.
OTC trading runs through a network of broker-dealers rather than a centralized exchange. Volume drops sharply compared to the national exchanges. The spread between what buyers will pay and what sellers are asking widens, and that spread makes it harder to sell without taking a real hit on price.
Broker-Dealers May Not Be Able to Quote the Stock
SEC Rule 15c2-11 adds a further constraint. Before a broker-dealer can publish a quote for an OTC stock, it has to obtain and review current information about the issuer and determine that the information is accurate and from a reliable source.7U.S. Securities and Exchange Commission. Publication or Submission of Quotations Without Specified Information If a delisted company stops filing and no current information is available, broker-dealers may not be able to quote the stock at all. That can make it nearly impossible for a retail investor to sell through a standard brokerage account.
Forced Selling and Brokerage Limits
Many mutual funds, pension funds, and other institutional investors have policies or charter restrictions against holding securities that aren’t listed on a major exchange. When a stock gets delisted, they have to sell, and that selling often floods the OTC market at the worst possible moment. Some retail brokerages also limit or refuse trades in certain OTC tiers, particularly the lowest ones. If your broker doesn’t support the tier your stock lands on, you may need to move the account to one that does before you can sell.
Whether the Company Still Reports to the SEC
This is where Form 25 is often misread. It terminates registration under Section 12(b), the provision tied to being listed on an exchange. Section 12(g) is separate, and it independently requires registration and reporting for any company with total assets over $10 million and a class of equity securities held by 2,000 or more shareholders, or 500 or more shareholders who are not accredited investors.8eCFR. 17 CFR 240.12g-1 – Registration of Securities; Exemption from Section 12(g)
A large delisted company with thousands of shareholders doesn’t escape SEC reporting by filing Form 25. It would still have to file 10-Ks and 10-Qs under Section 12(g). To fully go dark, the company would also need to file a Form 15 certifying that it falls below those thresholds. Small companies, typically those with fewer than 300 record holders, can suspend reporting that way. For a formerly listed company with a wide shareholder base, the reporting obligation often persists.
Tax Consequences for Shareholders
Delisting itself is not a taxable event. Moving from the NYSE to the OTC market doesn’t create a gain or loss. A taxable event happens only when you sell the shares, or when the stock becomes genuinely worthless.
If you sell delisted shares at a loss, it’s treated like any other capital loss. You can use it to offset capital gains first, then deduct up to $3,000 per year ($1,500 if married filing separately) against your ordinary income. Any excess carries forward to future tax years indefinitely.9Internal Revenue Service. Topic No. 409, Capital Gains and Losses
If the stock becomes completely worthless rather than just very cheap, you can claim a capital loss without selling. The IRS treats worthless securities as though they were sold on the last day of the tax year in which they became worthless.10Internal Revenue Service. Losses – Homes, Stocks, Other Property Proving worthlessness is the hard part. The company generally has to have ceased operations with no prospect of resuming them, and the stock must have no liquidation value. A stock trading at a fraction of a penny on the Pink market isn’t technically worthless yet, because it still has some market value. Many investors find it simpler to sell the shares for whatever they’ll bring and claim the loss on the actual sale.
Timing matters. If you held the stock more than a year before selling or claiming a worthless stock deduction, the loss is long-term. Long-term losses offset long-term gains first, and long-term gains are taxed at lower rates, so how your losses apply against your gains can change your overall tax bill.